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U.S. Securities and Exchange Commission head Gary Gensler says he believes the technology underlying cryptocurrencies is beneficial.
In a new interview with the Washington Post, Gensler says that blockchain technology, which gained its present-day prominence after the mysterious Satoshi Nakamoto created Bitcoin (BTC), is helping to improve payment systems.
“Nakamoto-san’s innovation, not only Bitcoin as the first sort of one, but this whole distributed ledger technology, has been a catalyst for change around the globe. Central banks and the private sector are looking in on how we can enhance our payment systems. And [in a way] to make them 24 hours a day, 7 days a week, real time, at lower cost.”
Blockchain technology is also spurring innovation in the markets and banking, according to the SEC chair.
“I also think it’s raising new and interesting innovations around how exchanges work and even potentially some forms of decentralized lending.
We’ve had peer-to-peer lending for 15-20 years, we’ve experimented with it. This is a new type of experiment. So, those are really interesting innovations challenging the established business models.”
Gensler also says he believes stablecoins, which are designed to maintain a constant value, are similar to “poker chips” and the need exists to regulate them before problems arise.
“These stablecoins are acting almost like poker chips at the casino right now. So, add to the Wild West analogy. I mean, we’ve got a lot of casinos here in the Wild West, and the poker chip is these stablecoins at the casino gaming tables.
And so, I think there’s just a lot of warning signs and flashing lights that we might have a spill in aisle three, and I’d rather get ahead of it.”